Wealth series: investing a work bonus to mitigate tax – part 4

摘要

The start of the year marks the point when many businesses announce how much performance-related pay employees can expect to receive in addition to their salary. Depending on their sector and position, payouts can range from a few hundred pounds to several million. Many employees, even high earners, will not seek financial advice when receiving their bonus. However, this advice can be extremely beneficial in ensuring they are making the most of their lump sum. If the bonus in question is substantial, the way an individual chooses to receive this lump sum will have a specific impact on their tax situation. If so, it is important for the client to have an idea how they want to use the money from the outset. Both an accountant and a financial planner have a specific role to play here: the financial planner guides the client through the different options available and works with them to establish the best fit; meanwhile, the accountant is on hand to ensure the client is fully compliant with any tax rules. Both the financial planner and accountant should be aware of the regulatory rules surrounding bonus planning.